A Great Idea From Bill Gates

The Microsoft Chairman said that consumers should just buy CDs and rip them onto their mobile music devices. Sound idea. It gets around digital rights management (DRM) which will never fly with the music buying public and will only serve to depress online profits until labels give it up. Perhaps Gates was prompted to make his comment in light of a Forrester research study that alleged Apple iTunes sales were down. Forrester has since modified their dire projections and blamed it on too small a sample size. One thing they are correct about. DRM is hurting digital music sales. And the average amount of new music per iPod owner is only 22 songs (up from 20). Approximately two albums for comparison sake. But let me add some caveats to Gates' advice even if he only meant it to be a jab at Apple. If I'm a record label, I'm lowering the price of all new albums to $9.99 to compete with the iTunes price. Of course the CD comes with no DRM restrictions. In other words, labels would then have a way to sell more CDs. Apple has only 6% of the music market, but it dominates MP3 sales. Everyone knows Apple CEO Steve Jobs just wants to sell iPods. Apple is not getting rich on 99 cent tunes. Once DRM is removed from legal downloads, Apple and other sites will be ready for boom times. In the meanwhile, lowering the price of a standard CD to 99 cents could be a boomlet of sorts for record labels.